UPDATE: UBS Upgrades DENTSPLY SIRONA (XRAY) to Buy, 'Favorable Risk-Reward as Inventory Issue Appears to be Manageable'

UBS analyst Kevin Caliendo upgraded DENTSPLY SIRONA (NASDAQ: XRAY) from Neutral to Buy with a price target of $47.00 (from $58.00).

The analyst comments "We are raising our rating on XRAY's stock to Buy and establishing a new PT of $47, implying ~18% upside potential from its recent closing price. Following extensive channel checks and financial analysis, we believe that the various concerns coming out of the company's 1Q earnings (increased inventories, lower margins, global macro supply chain, COVID, and management uncertainty) are explainable and largely transitory. In 2018, XRAY fell ~50% after it was disclosed the company had excess inventory as a result of misusing an exclusive relationship it had with PDCO to distribute certain products. Our analysis of the current inventory headwind suggests that the issue meaningfully less impactful than 2018, yet the stock is down near 2018 multiples. We also expect margins to stabilize and cash flow to improve going forward, with upside to our estimates if new product launches expected in 2H22 accelerate top line growth."

For an analyst ratings summary and ratings history on DENTSPLY SIRONA click here. For more ratings news on DENTSPLY SIRONA click here.

Shares of DENTSPLY SIRONA closed at $39.56 yesterday.

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